Spain is known as who your glazes country the land of the flamenco and high unemployment
Rates even now and all of Europe is emerging from the crisis this country maintains a higher unemployment rate than
Iraq or Albania in other words Spain isn't exactly a role model as far as economics is concerned
However, there's a region that doesn't fit at all in this category
Yes dear viewer we are talking about the basque country also known as use katie along with navarro
These are two of the richest and most prosperous regions in the entire of spain both of the Basque Country and Navarre
usually at the top of every indicator far above by the way Catalonia in other words
We could say that these two regions are
something like a small
Germany within Spain with an entirely different political system to the rest of the country and a business sector more typical of
northern Europe than southern Europe
Moreover this area has its own language
This is called a scatter unlike Catalan ao Sierra sounds nothing like Castellon
But that is not all like Catalonia the Basque Country also has an important
separatist movement in fact ten years before catalan politicians began to demand independence
For a secured governments had also tried to become a sovereign state
This was known as the abara che Plan C prevent presidents of the Basque Country Boris is officially called the Basque lehendakari
Juan Jose Eber ah Cheh tried to divorce from Spain and
They went pretty badly much that is something. We are going to address in a whole other video
So let's get on to today's question
And that's why is the Basque Country and Navarre?
Richer than the rest of Spain why do we say that they have a different political system to the rest of the country well we?
Are going to answer all of those questions today, but before we do. Let's dive into the history
Medieval heritage both regions the Basque Country and Navarre have a special status called the Basque
Economic agreements many people think that this special status came from the Middle Ages, but the truth is that it did it
See in the year 1200 the ancient kingdom of Navarre
What are now known as the a larvae biscaia?
And keepers queer
Provinces in navara itself joins the castile crown as a condition for this union the Castilian King had to recognize these so-called
Navarez Queiroz or laws
That is to say that this kingdom would maintain an independent government with its own laws its own courts and its own taxes for example
No navara citizen could be forced to do military service these Nevarez laws remained practically unchanged for centuries
but don't think that this is an anomaly every feudal or
Absolutist political system be it in Spain France or the United Kingdom was full of regions with special rights and special laws however
things changed in the 19th century at that time Spain was
Consolidated as a modern state and it decided to imitate the model of Napoleon's France that is a centrist model
But that means that almost every law would be dictated from the capital and would apply equally
Throughout the territory as you can imagine this did not please the Neva Ruiz and the Basque citizens
Suddenly, that's pay more taxes and do compulsory military service, not a great combination this explains
Why during the 19th century Spain had not one not two, but three
Civil wars these were these so-called Carlist Wars where the old regime supporters mainly Basques
And neva Ruiz fought against the Spanish army then in 1876 when these Nevarez Basque troops were defeated the laws were abolished
Suddenly these four provinces had to follow the laws that came from Madrid
In addition they had to pay a percentage of their taxes to the central state in return Madrid allowed them to retain a special fiscal
Status and this concession is what we call the Basque
Agreement which as you can see wasn't born in the Middle Ages, but was approved in exchange for abolishing of the laws
But it doesn't end there
Decades later in 1939 Franco's dictatorship
eliminated this economic agreement
But only in the two provinces that didn't support him hooey boosts Goa and Disgaea as you can really see from all of this
It's a rather torturous story with Wars and demands from both sides both provinces
Which lost their special fiscal conditions were especially hurt and this can be seen today where a huge percentage of Biscay ins and creepers Cohen's
Want independence from Spain and all this explains?
Why in the 1970s the new democratic spanish constitutions writers wanted to combat said basque and Lavar the basque?
agreements returns, but this time in a modernized version
The mask quota, this is one of the most confusing
Issues in Spanish politics see if a citizen lives in Malaga or or valid a lid he or she pays most of their taxes
Directly to the central government of course there are some special taxes that depends on the city or the autonomous community
But the vast majority goes to the National Treasury
Afterward the state distributes this money among the different autonomous governments as ever they see fit
These are the so-called
Autonomic transfers and of course some regions tend to benefit from these transfers and others are harmed in
Theory, and this is quite debatable the richer regions help the poorer regions
however both Navarre and the Basque Country have a different system in this case the
Provincial governments collect almost all of the taxes and notice here that I said
Provincial this means that if a citizen lives for example in bilbao
They do not pay taxes to the basque government
But to the FISC iya provincial council and this provincial government has the autonomy to do things like this
This kya will change taxes on company profits to increase competitiveness
So maybe you remember in another video we told you why?
Switzerland is so rich now one of the reasons for this is that in Switzerland
Each can song can compete with each other by offering better fiscal conditions while something similar is happening in the Basque and the vara
provinces and that explains why
Taxation in these regions is a little lower than it is in the rest of Spain now you may be wondering
Do these provincial councils pay nothing to the Spanish state well?
No There's none of that so that's where these so-called Basque quota comes into play the Basque
Quota is the percentage these regions pay to the central government in exchange for the common services. They enjoy for belonging to Spain
For example the army embassies and roads all these are paid by Madrid
But the Basques can also enjoy them they therefore have to pay part of the cost
And not only that if for example Spain decided to increase their defense budgets the basket quota would also grow proportionally
As you can imagine all of this is theoretical the truth is that the basket quota is the result of political negotiations?
That's a different story for a different day
The truth is that unlike all the other autonomous communities the Basque Country in navara know
Exactly how much money they pay for the common cause and how much remains and in most cases
This is a fantastic advantage, but just wait a moment because this doesn't end here
In principle it might seem that the economic agreement is a fair system
Everything in the negotiation is black and white but the truth is that the system is far from perfect
jumera
When I said that the central state distributes the money that it collects among the different autonomous communities while the truth is that both
navara and the basque country
Belong to this distribution and being such rich regions it would be logical to think that they would contribute more than they receive well
That is totally not happening
The basque country receives twice as many resources per capita as madrid
catalonia or Andalusia and so now you may be asking yourself this and that's well how is this possible the reason was purely political
as I was saying Basque
Nationalism is as important as Catalan nationalism that means that these autonomous communities have their own
political parties parties such as the Basque Nationalist Party
Which holds its communities government and has a strong representation in the national parliament
Well every year the central government has to approve national budgets in Parliament for that
They need an absolute majority the majority that in most cases requires support from these parties however
This isn't the only reason for the basque country's prosperity not at all in fact
There's much more at play here and let's look into it right now
In Germany and Spain have you heard of a company called Oakley?
Well if you have a gas stove you might earn some of their products. It's the world leader in manufacturing
Systems for preventing accidents and gas leaks and their headquarters are in order Zia a town in the deepest Cova province the same goes for
Je ma if you have an armored door in your house
It's highly likely that both the lock and the keys have been manufactured by this company which is located in
Mondragon, this is a small basque town. These are the so-called hidden leaders
They are small hyper specialized companies that have become benchmarks in their niche and which have devastated the
international markets in a previous video we told you how Germany owes part of its wealth to Mittal stance
Well the Basque economic model is very similar moreover if you have the opportunity to travel by road through Yeti
You'll see factories dispersed throughout its landscape in fact its population is
Much more scattered than anywhere else in Spain of course there are large cities
But most people live in urban centres of less than 40,000 inhabitants
And most of these municipalities have business hubs that employ locals in the Basque Country economic activity isn't only
Concentrated in large cities, and now you may ask yourself well
why does this kadhi have such a homogeneous business network for this we return to the same principle and that's
decentralization by having four different Treasuries with autonomy to collects taxes and make investments
There's a higher tax competition than in any other part of Spain this means that public investments aren't
Concentrated in a specific place that are distributed evenly
Vesting in startups will have a 30% deduction in
buscar in other words
It's true both the Basques and the Nevarez have a huge advantage because they receive money from the central state
But that money has been invested much more efficiently than in any other region in fact
It's no coincidence that these two communities are the least
Indebted in all of Spain and that in addition. They have hardly any of the corruption cases that have poisoned the rest of the country
So now the question is do you think some elements of the Basques and Navarre ease models could be rescued and
replicated in other countries
Do you think it would be possible to apply the basque agreements to other regions?
Well, let us know in the comments section below. Also as always
Thank you for watching and please do leave a like and do subscribe we have brand new videos every Monday and Thursday also
Let me Thank our friends at the reconsider media podcast they provided the vocals in this episode that were not mine and as always
Thank you for watching